A Week Is A Long Time In Sports Advertising and Sponsorship

BY ADAM GROSSMAN

Former Labour Prime Minister Harold Wilson is usually credited with the quote, “A week is long time in politics.” This can be applied to almost any industry these days and the sports business is no exception, particularly when it comes to sponsorship and advertising.

Last week, sports marketing agency Two Circles projected that there would be a 37% year-over-year decrease in sports sponsorship spend last week. This week, Corey Leff of JohnWallStreet reported that the national and regional networks are expecting “a very healthy and active market” for sports television advertising by the fourth quarter of 2020.

This definitely appears confusing. How can sports sponsorship be expected to take such a significant hit at the same time that sports television advertising seems poised for an immediate recovery?

There are two answers to this question. The first is that new sports content on television continues to demonstrate substantial demand even if played without fans or in venue sponsorship activation. For example, last Sunday’s Capital One’s The Match: Champions for Charity generated an average of 5.8 million viewers making it the most-watched golf telecast in the history of cable television including past telecasts of the Masters Golf Tournament on ESPN.

The Match follows the success of The Last Dance which averaged a similar number of viewers during its ten episode run. In addition, NASCAR’s return to live racing has set viewership records for non-Daytona and weekday-run races.

The second, and arguably more important, answer lies in an important insight highlighted in the report by JohnWallStreet and echoed in the analysis by Two Ciricles. As Leff states, “But one national TV advertising executive told JohnWallStreet by Sportico that ‘one size doesn’t fit all when it comes to how the economy is doing’ for every category suffering (think: casual dining, hotels & airlines), there’s another thriving as a result of the pandemic induced lockdown (think: quick service restaurants, cleaning supplies and food delivery) (emphasis in original).”

The main takeaway is that different companies are in different positions and will achieve different values even for the same television advertising opportunities. The companies that are “thriving” (or at least not doing poorly) have a unique opportunity to be “aggressive [with their marketing campaigns]” and then “emerge from [lockdown] in an even stronger [competitive] position” by increasing market share.

How can companies that are in position find the right opportunities to activate these campaigns? Our clients have found that our Audience Inference Platform (AIP) enables them to accomplish this goal. More specifically, they are able to look at the conversation from the followers of their accounts to determine the keywords and topics of interest. They then can reach out to sports properties (leagues, teams, events, athletes, and / or media companies) for potential sponsorship opportunities based on this information.

Our clients then use our Corporate Asset Valuation Model (CAV) to evaluate the opportunities based on their specific revenue and brand needs. In particular, our model would weight more heavily activations that enable companies to directly engage with new customers to drive purchasing decisions and increase market share.

The projected increase in demand for sports television advertising is good news for the industry. The partners and properties that identify the right opportunities and understand how to maximize return on investment (ROI) will most benefit from this uptick in demand.